Corruption and stock market development in EAP countries
Using macroeconomic factors as control variables, this paper examines the impact of corruption on the development of the stock market in East Asia and the Pacific (EAP) from 2008 to 2018. The research model uses GMM techniques to estimate panel data on two sub-sets of data, including five developed...
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| Format: | Article |
| Language: | English |
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LLC "CPC "Business Perspectives"
2020-07-01
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| Series: | Investment Management & Financial Innovations |
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| Online Access: | https://businessperspectives.org/images/pdf/applications/publishing/templates/article/assets/13701/IMFI_2020_02_Mai.pdf |
| _version_ | 1811276372878819328 |
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| author | Phuong Lai Cao Mai |
| author_facet | Phuong Lai Cao Mai |
| author_sort | Phuong Lai Cao Mai |
| collection | DOAJ |
| description | Using macroeconomic factors as control variables, this paper examines the impact of corruption on the development of the stock market in East Asia and the Pacific (EAP) from 2008 to 2018. The research model uses GMM techniques to estimate panel data on two sub-sets of data, including five developed markets and seven emerging markets, and a dataset of both market groups. The market capitalization and the stock transaction value relative to GDP represent the development of the stock market, and the corruption control index represents the corruption factor. The empirical results found that corruption has a positive impact on the EAP stock market capitalization with the entire sample data set, which positively affects both size of the market capitalization value and value of stock transactions in underdeveloped markets. However, it is not statistically significant in explaining the development of developed stock markets. Besides, macroeconomic factors such as inflation, interest rates, savings, and credit affect some stock markets at EAP. Compared to previous studies, the article’s results found that corruption affects stock market capitalization and has a positive impact on stock liquidity in underdeveloped stock markets. Corruption affects more underdeveloped stock markets than developed stock markets. This may be due to the implicit relationship of economic benefits between large enterprises and officials in underdeveloped markets. |
| first_indexed | 2024-04-12T23:56:27Z |
| format | Article |
| id | doaj.art-05fe72c1dcb74451b86663cde1fc7567 |
| institution | Directory Open Access Journal |
| issn | 1810-4967 1812-9358 |
| language | English |
| last_indexed | 2024-04-12T23:56:27Z |
| publishDate | 2020-07-01 |
| publisher | LLC "CPC "Business Perspectives" |
| record_format | Article |
| series | Investment Management & Financial Innovations |
| spelling | doaj.art-05fe72c1dcb74451b86663cde1fc75672022-12-22T03:11:29ZengLLC "CPC "Business Perspectives"Investment Management & Financial Innovations1810-49671812-93582020-07-0117226627610.21511/imfi.17(2).2020.2113701Corruption and stock market development in EAP countriesPhuong Lai Cao Mai0https://orcid.org/0000-0002-2947-2488Ph.D., Faculty of Finance and Banking, Industrial University of Ho Chi Minh City, Ho Chi MinhUsing macroeconomic factors as control variables, this paper examines the impact of corruption on the development of the stock market in East Asia and the Pacific (EAP) from 2008 to 2018. The research model uses GMM techniques to estimate panel data on two sub-sets of data, including five developed markets and seven emerging markets, and a dataset of both market groups. The market capitalization and the stock transaction value relative to GDP represent the development of the stock market, and the corruption control index represents the corruption factor. The empirical results found that corruption has a positive impact on the EAP stock market capitalization with the entire sample data set, which positively affects both size of the market capitalization value and value of stock transactions in underdeveloped markets. However, it is not statistically significant in explaining the development of developed stock markets. Besides, macroeconomic factors such as inflation, interest rates, savings, and credit affect some stock markets at EAP. Compared to previous studies, the article’s results found that corruption affects stock market capitalization and has a positive impact on stock liquidity in underdeveloped stock markets. Corruption affects more underdeveloped stock markets than developed stock markets. This may be due to the implicit relationship of economic benefits between large enterprises and officials in underdeveloped markets.https://businessperspectives.org/images/pdf/applications/publishing/templates/article/assets/13701/IMFI_2020_02_Mai.pdfcorruptioncreditinflationinterest ratesmarket capitalizationsavings |
| spellingShingle | Phuong Lai Cao Mai Corruption and stock market development in EAP countries Investment Management & Financial Innovations corruption credit inflation interest rates market capitalization savings |
| title | Corruption and stock market development in EAP countries |
| title_full | Corruption and stock market development in EAP countries |
| title_fullStr | Corruption and stock market development in EAP countries |
| title_full_unstemmed | Corruption and stock market development in EAP countries |
| title_short | Corruption and stock market development in EAP countries |
| title_sort | corruption and stock market development in eap countries |
| topic | corruption credit inflation interest rates market capitalization savings |
| url | https://businessperspectives.org/images/pdf/applications/publishing/templates/article/assets/13701/IMFI_2020_02_Mai.pdf |
| work_keys_str_mv | AT phuonglaicaomai corruptionandstockmarketdevelopmentineapcountries |